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Investing In India: PPF And PF – How They Are Different?

Confused between what PPF and PF mean? Well, this is going to take away all of your confusion. Provident fund of PF are the contributions which are usually made by a number/group of people. PF is led by government and is basically a savings scheme which encourages the retirement savings in the people who are salaried. 

Every month a portion of their salary is invested into an account which is later given to the employee during the retirement time. There are various types of PFs like employee provident funds, unrecognized provident funds, statutory provident funds, public provident funds.

So what’s PPF?

PPF is basically a public provident fund which is a fund used for tax saving in India. 500 rs is the minimum amount and the maximum for PPFs are 1.5 lakhs. The fund is going to give amazing returns alongside tax saving opportunities. Not a serviceman? Not an issue! The person opting for PPF doesn’t need to be salaried so anyone and everyone can opt for PPFs. All they need to do is to maintain the fund by paying the 500 rs. Still confused regarding the difference between both? Well, take a look.

Difference between PPF and PF

  • Provident fund of PF is just a kind of savings funds account whereas PPF is a part of the PF. PPF falls under PF.
  • The public provident fund is simply a category of PF. The other categories are unrecognized PF, employee PF, and statutory PF.
  • For someone to be eligible for PFs they need to be salaried. So only salaried employees are eligible for PFs whereas for PPF self-employed individuals are the ones who are also eligible. So anyone with an income is eligible for PPF.
  • For public provident funds, the individual investing contributes in the fund only, no one else makes any kind of monetary contribution. On the other hand for provident funds, the employer also contributes an equal amount of money as what is contributed by the employee in the fund. So there are two people contributing to it.
  • In case of the public provident funds, the money cannot be withdrawn before 15 years has been completed. Whereas provident funds can be withdrawn easily by the employees before it is completed. A fee needs to be paid for this but nevertheless, it can be withdrawn quite easily.

You see, these are the basic differences between PPF and PF. Anyone can do a PPF but not everyone is eligible for a PF. For that, you need to be a salaried employee somewhere. These PPF and PFs are highly advantageous as this helps to save money for future and old age, that is for the time of retirement. Thus everyone should consider investing in PPF if they are not eligible for PF. Don’t have much time? In PF a part of the salary automatically gets deducted and added to the fund so no individual effort is needed. So, these two are really beneficial for the people who want to save up for the future.

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